Businesses operating in South Africa are under obligation to pay tax to the South African Revenue Service (SARS). While tax demands often feel like a burden, tax authorities have put in place provisions which lessen the tax burden. Through these provisions, businesses are allowed to write off any business expense that was incurred while producing income. Here are some of the business expenses you must remember when adding up tax breaks.
The definition for office equipment is incredibly loose, but can be summarised as any piece of equipment used in the business to meet business goals. Stationery and computers come to mind, but this definition can widen to include all kinds of furniture in the business, printers and their consumables like ink cartridges and paper, or even maintenance and cleaning supplies.
If you feel charitable and donate to a public benefit organisation, the Income Tax Act states that you can also claim deductions against taxable income. To be able to claim this deduction, one must furnish SARS with a Section 18A certificate from the public benefit organisation to which the donation was made during the year of assessment.
If you invest in education that helps you maintain or improve skills associated with running your business, you can deduct the expenses.
Depending on what type of business you’re in, there can be a lot of travelling that gets done in the process of running it. Any expenses incurred through the use of company-registered vehicles, any costs that employees had to pay while travelling to and from meetings with clients, and any flights and bus fares paid in pursuit of business all qualify as tax deductibles.
Telephone and mobile expenses fall within the definition of tax deductible business expenses for the simple reason that your telephone and mobile phones will be used to conduct business and produce income. Most businesses don’t bother claiming these deductions because of the effort involved to keep call logs for calls made every day over the course of a year, for those who do, there are rebates to enjoy.
All of the expenses you incur while entertaining clients are also tax deductible. These could include drinks, meals and live entertainment enjoyed as part of a business meeting. The only thing is you need to prove to SARS that the entertainment was provided in the pursuit of business.
Next time you need to draw a tax deductible list, think of expenses incurred in the production of income.